Posted on: 30-06-08 09:03:06
Hi,
Has any one invested in commercial real estate here ? What are the pros and cons against residential real estate ? From a broad perspective, how are the prospects? including investment, rent, tax, maintenance etc..,
Alternatively, how is to invest 20% down payment on a second home and rent both main unit and basement around Brampton where a 3-bed detached home with basement cost around 320-330K expecting the rent to cover the mortgage. I think some of the CDs have invested in second home. Cost benefit analysis? though I couldn't expect a return from income perspective but the cost of land and appreciation of the house in 10-15 years when it could possibly be paid off.
Currently my monthly mortgage payment is about 22% of monthly house hold income (and I have 40% equity on my current residence), that is one of the reason I am looking to push little hard. I prefer to invest where I live rather than India / Dubai where I need to rely on some one else.
Thanks in advance.
P.S. Corrected my post in representing my mortgage due.
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The cowards never started,
The weak died on the way,
Only the strong arrived.
http://www.youtube.com/watch?v=_yK1i9cLAMM
Quote:
Originally posted by JRF
Hi,
Has any one invested in commercial real estate here ? What are the pros and cons against residential real estate ? From a broad perspective, how are the prospects? including investment, rent, tax, maintenance etc..,
May be this http://www.canadiandesi.com/read.php?TID=19102&page=2
would give you some insight.
Quote:
Originally posted by JRF
Alternatively, how is to invest 20% down payment on a second home and rent both main unit and basement around Brampton where a 3-bed detached home with basement cost around 320-330K expecting the rent to cover the mortgage. I think some of the CDs have invested in second home. Cost benefit analysis? though I couldn't expect a return from income perspective but the cost of land and appreciation of the house in 10-15 years when it could possibly be paid off.
Investing in residential real estate property is comparatively easy and with less hassle than in commercial real estate investing. I have some of my clients who are in to residential real estate investing and some of them are part of some real estate investing groups. These real estate investment groups teach their members as to how and what to look for in a property and do the projections for the cash flow etc. to find out if the property is going to give a positive cash flow or not. And their Mantra is that if a property is not likely to give you positive cash flow than you do not buy that property at all.
Quote:
Originally posted by JRF
Currently I have a mortgage which is about 22% of total house hold income, that is one of the reason I am looking to push little hard. I prefer to invest where I live rather than India / Dubai where I need to rely on some one else.
Thanks in advance.
You do have a good amount of equity in your present home. If you take the money out and invest in income producing property, apart from rental income and positive cash flow, you would also have tax benefits by writing off your interest and other expenses against your other income as well. However, you need to do things correctly and keep good accounting and proper paper trail so CRA does not have (or cause) problem.
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Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada
Pramod,
Thanks for jumping in the thread and offering your points. The thread you pointed is most appropriate to resume this discussion, I will post it there.
With reviewing links BV posted in the other thread, I will re-evaluate my capacity and risk tolerance.
Regards,
JRF.
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The cowards never started,
The weak died on the way,
Only the strong arrived.
http://www.youtube.com/watch?v=_yK1i9cLAMM
